Mexico captured major drug trafficker Edgar La Barbie Valdez on Monday in a new victory for President Felipe Calderon's high-stakes war on murderous cartels that threatens the country's image among investors and tourists.

Federal police caught Valdez, a leader of the Beltran Leyva cartel based in central Mexico, in a residential area near Mexico City, the government said.

Valdez, a 37-year-old Mexican-American born in Texas, put up little resistance, a police spokesman said.

Valdez has connections with organized crime groups operating in Central and South America to smuggle drugs to the United States, where he is also wanted, national security spokesman Alejandro Poire told a news conference.

Nicknamed La Barbie for his fair complexion, Valdez is believed to have been behind a surge in bloodshed in central Mexico as he fought for leadership of his cartel. U.S. authorities put a $2 million bounty on his head but Poire did not say if Valdez would be sent to the United States.

After tracking Valdez for more than a year, the capture by Mexican officials on Monday follows the killing last month of another major drug boss, Ignacio Nacho Coronel.

This is clearly an important capture and will take some pressure off Calderon in the short term but the impact will only be partial unless the government moves to arrest La Barbie's hitmen and dismantles his gang, said Pedro de la Cruz, a security analyst at Mexico's National Autonomous University.

Unfortunately for Calderon, his capture could provoke even more violence if the Sinaloa cartel, the Zetas and La Familia try to move into his territory, which is very likely.

Calderon is struggling to contain growing alarm in Mexico and abroad over his drug war. More than 28,000 people, mainly traffickers and police, have been killed amid vicious turf battles sparked by the army-led crackdown in the 3-1/2 years that the austere former lawyer has been in power.

BUTCHERY OVERSHADOWS CAPTURES

Backed by Washington, Calderon has made it the central goal of his presidency to crush the powerful cartels that earn an estimated $40 billion a year. But the bloodshed, including the torture and butchering of captives by rival gangs, has overshadowed most of Calderon's successes.

Officials announced this week they had fired nearly 10 percent of the federal police force as Calderon seeks to rein in the cartels and curb widespread police corruption.

But in a sign violence has not abated, a shootout on Monday between the army and drug hitman lasted for more than 12 hours and killed eight people, terrorizing the town of Panuco in the Gulf state of Veracruz.

Recent drug-related violence has included the killing of 72 people, thought to be migrant workers, near the U.S. border, the murder of a candidate for governor in the same region and slayings of groups of people at rehabilitation centres and parties.

Drug hitmen have also used small car bombs for the first time in recent weeks as they also target mayors and step up their intimidation of newspapers and television stations.

Valdez has been a leading contender to head the Beltran Leyva cartel since soldiers killed its former boss, Arturo Beltran Leyva, in December 2009, triggering a power struggle within the organisation.

Valdez was once close to top drug fugitive Joaquin Shorty Guzman, head of the Sinaloa alliance based in northwest Mexico, after growing up selling marijuana in the United States and developing a taste for luxury cars, nightclubs and designer clothes. Guzman is also a former ally of the Beltran Leyva brothers but the two gangs are now bitter rivals.

It's a good score for the government but it's also good news for the Sinaloa cartel, Mexican drug trade expert and columnist Jose Reveles said of Valdez's arrest.

(Additional reporting by Cyntia Barrera, Adriana Barrera and Robin Emmott; Editing by Missy Ryan and Kieran Murray)

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